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Psychology Of Money

How I Paid Off $35,000 of Debt Over Lunch

Alden Wicker
Erin Frank as told to Alden Wicker
Posted on Jan 25, 2013

In 2005, I moved to New York to start a job in book publishing. I had $28,000 in school debt, and no credit card debt—but I underestimated how much it cost to live in the city.

I was only making $30,000 (about $27,000 after taxes), yet I wanted anything and everything. I was a huge fan of Broadway. I wanted to go out to dinner. As a result, my credit card exploded—in a year, I went from zero in credit card debt to $8,000!

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My mom was really concerned, so she lent me the $8,000, with no interest. I used it to pay off my card—and then started charging it again.

One day in 2008, I tallied up my personal loans and credit cards and realized that I was $16,000 in debt—and that didn’t include school loans. It was more than half of what I made in a year.

When two co-workers and I started joking about how broke we were, I realized that we were in similar straits. We looked around for help and inspiration, but we could only find investment and money planning groups for older individuals—people who made at least twice as much as we did.

So I proposed starting our own group, which we called “Money Lunch.”

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  • Guest

    This was one of the best articles I have read on this site! Thank you for sharing your story.

  • evr

    this piece makes me feel motivated and inspired on several levels

  • Cc11782n

    One of my friends and I do this! We have various goals – financial, and health related, and to keep eachother honest and to really make progress we have daily emails where we detail our progress – and our shortcomings. We don’t get down on eachother though – we just try to encourage and motivate. Our stories are so similar to Erin’s, and it took us both awhile to realize (me especially) that there is a light at the end of that tunnel and we’ll make it there! Thank you for sharing your story!

  • Andrea

    Great story! Really inspiring and doable, too. Thank you! 

  • Alison

    I don’t even know you and this story makes me proud of you!  I love that you found a group of supportive women.  I also reached a point in my life where I realized I had to live my life, not someone elses and since then my favorite quote is “comparison is the theif of joy”.

  • VCA

    i love inspiring articles like these, i need more insipiring articles like these!!

    Thanks for sharing your story……LV, more similar articles please!

  • lizlemony

    I LOVE the idea of “secret squirrel saving.” Going to try that one! Just have to think of an ideal place in my apt. to stash it…

  • Munozyoshi

    Love reading these stories. I finished college with about 30K in student loans and 2K in credit debt. Over a year or so I went up to about 7K in credit debt and my student debt went down to 27K. I put my debt in a spreadsheet and I too got a look at the big picture. I was surprised how much I wasted on food and outings with friends. One year later I’ve managed to pay off all my credit debt and lower my student debt to 20K. It’s a single loan that is consolidated with low interest. I’m still getting there but having lower debts is a great feeling.

  • Lailarkhalili

    Looks like I need to start a money lunch group with some of my college friends. Read: we’re in college! Thanks for the article. It’s fantastic.

  • Tammy A Hsu

    This is one of the best articles you’ve ever posted!!

  • guest

    this is a great article!! i’m always shying away from looking my debt square in the face, and i know i need to soon because my husband and i are trying to refinance and eventually buy a new house. i need the courage to look my debt square in the face, and let it know that i will conquer it just like erin did! thanks for this!

  • Just Jill

    Thank you so much for this article! I am just like you, having a hard time finding financial advice that isn’t for people who make $60,000 year, and this was so inspiring! Thank you!! Fantastic job!

  • Kretek

    I’m having my 26,000 in student loans consolidated, I owe my parents $2,600 and I owe the credit card companies $9,200 and I got the bad news that in the next 2 months I need a crown on one of my teeth. It’ll be a slow crawl out of debt, but I actually can afford to put $500 into the debt pool every month after paying off my bills and after loading $300 in my savings. I’m not bad off but I made some bad financial decisions. Time to set them right.

    • Rondavue66

      If you take the extra money and pay it towards your smallest debt and then once it’s paid for take all that money and pay the next. It works to quickly pay things off and helps to motivate you seeing things gone. The snowball affect. That’s how I did and I had over $28,000 of debt paid in 9 months on $49,000. I didn’t have a life for 9 months but I’ve been debt free over 3 1/2 yrs now.

  • Maggie

    Thank you for a great article! Now THIS is something I can relate to, my income and debt picture are similar and I see that she used simple strategies that anyone can do to get hers under control. I wanted to cry when I received my tax statement and saw that I paid only interest on my student loans last year, not a penny of principle. This gives me the hope I needed.

    • Jason

      I was there last year and I felt awful too.  I called my student loan bank and I asked them if they could lower my interest rate.  They told me that if I allowed them access to my checking account so they could take the monthly payment directly from my bank account on a monthly basis (vs sending a check) they would lower my interest by 1%.  I did it and now I’m seeing progress on my loan balance.    And call your student loan administrator too!  you have nothing to lose, worst case scenario they will say no.  Most importantly, don’t give up, keep chipping away, it will get better.

  • amp

    Thank you– great article!  Less sexy than the articles about  folks with huge salaries who pay off their debt but much more helpful and inspiring for us folks with normal salaries.

    • Jason

      exactly what I was thinking!

  • Yvonne Law

    I could really relate to this – after I got my first job, I didn’t have a clear picture of my financial situation and started spending, and racked up $6,000 of credit card on top of the $2,000 that I already had built up from my last year of college. I’m already working on getting out of debt, and this is a great motivator – I can do it too!

    • http://www.incomesolutions.com.au/ Amy

      Yvonne, I think everyone is guilty of this. I’ve seen many couples who just haven’t sat down and actually done a budget and looked at what they are spending their money on and ended up in much worse debt than that!!

  • Jason

    Bravo!  great story, you have a lot of discipline and courage. Thanks for sharing your story with us

  • http://twitter.com/SenseofCents Michelle

    Great story! Very inspiring and motivating.

  • Thriftywriter

    The fact that this is someone who didn’t make much money and was still able to pay off her debts (or almost all of them) makes this inspiring!  I hope the editors are taking note of all the positive comments and will provide more articles like this.

  • Mara

    Awesome article!  Kudos to you for being so responsible and building a group of supportive women.  What a great idea.  Sometimes I think we can all feel alone in financial turmoil, but it is so common.  I loved the tips you gave as well!  

  • PalB.

    Because of my brought up, I had the judgement of deciding between the things that I need and things that I want very early on. Thank you for reaffirming what a blessing it is in disguise to prevent me from the situations faced by you. Good luck for paying off the remaining debt!

  • Natalie

    Thank you, thank you!! You proved that slow is how most people pay off their debt, not in one year. I’m a single parent and I have restored hope that I will one day be out of debt. $45 at the end of the week? Eating bread n butter for dinner? I can so empathize. Thank you for sharing your story!

  • Mara

    good job! :)  

  • Swaters

    It’s a very timely article for this 72 year old lady.  Even we older gals get in trouble sometime, and I desperately needed some help in getting my credit card paid off.  Thanks so much for sharing your story – and pray for me that I can get my card paid off, too, and then to stay OUT OF DEBT!!

  • Fivestarhairstudio

    I love this article!!! it inspired me, Thanks

  • Guest

    This article was awesome. I’m just starting on my path to no debt so-any stories of people achieving it are really motivating.

  • Mindyterw

    this is a great story. I am 70 and so is my husband.  we are retired and no better than being in credit cartd debt.  But we are and it is not a good feeling.  We made a plan to pay it all off in 2 years.  I feel good about it and I know we can do it.  We do the same and talk about what we need and want and we have really been sticking to a budget…
    Thanks for this article…

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